Global Dairy Trade Results Update – 10/20/20
Executive Summary
Dairy product prices continued to strengthen during the GDT event held Oct 20th. Highlights from the most recent auction include:
The GDT Price Index remained 4.3% below previous year price levels at the Oct 20th auction, declining on a YOY basis for the 16th time in the past 17 events. The GDT Price Index finished 1.1% below the three year average price for the second auction of October, finishing below three year average figures for the 18th consecutive event.
Within the latest auction, increases in prices were led by butter (+3.3%), followed by cheddar cheese (+3.0%) and whole milk powder (+0.3%). The increases more than offset declines in skim milk powder (-0.2%), anhydrous milkfat (-0.5%) and lactose (-8.0%) prices. Butter milk powder and sweet whey powder were not sold at the Oct 20th event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and skim milk powder (SMP) has been adjusted to 35% protein content (equivalent to U.S. nonfat dry milk) in the $/lb columns below. CME spot and average futures prices are based on Oct 19th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Oct 20th event declined 1.3% from the previous event while finishing 10.5% lower on a YOY basis. The YOY decline in total quantities sold was the seventh experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of September, October and November.
Volumes sold for all products within the October auctions increased 0.4% from average September volumes sold but remained 9.9% below last year’s average volumes sold for the month of October. Volumes sold for all products finished 11.0% below three year average seasonal figures, declining to a four year low seasonal level, overall.
U.S. butter prices finished at a discount to GDT winning prices at the Oct 20th event as GDT butter prices rebounded to a three month high level. U.S. spot butter prices are currently trading at an 8.0% discount to GDT prices while CME futures prices traded at a 0.9% discount to GDT prices from Nov ’20 – Mar ’21. Butter was not sold at the GDT auction for Contract 6 (Apr ’21).
U.S. cheddar cheese prices remained at a premium to GDT winning prices at the Oct 20th event, despite GDT cheddar cheese prices rebounding to a three month high level. U.S. spot cheddar cheese prices are currently trading at a 44.8% premium to GDT prices while CME futures prices traded at an 11.4% premium to GDT prices from Nov ’20 – Apr ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Oct 20th event, despite GDT SMP prices declining for the second consecutive auction. U.S. spot NFDM prices are currently trading at a 14.4% discount to GDT SMP prices while CME futures prices traded at a 13.6% discount to GDT SMP prices from Nov ’20 – Mar ’21. SMP was not sold at the GDT auction for Contract 6 (Apr ’21).
- The GDT Price Index increased 0.4% at the Oct 20th event, finishing higher for the third consecutive event.
- Increases in prices within the Oct 20th event were led by butter, followed by cheddar cheese and whole milk powder. Butter and cheddar cheese prices each reached three month high levels throughout the Oct 20th event. Skim milk powder prices declined for the second consecutive event, while anhydrous milkfat and lactose prices also declined throughout the most recent auction.
- Total quantities sold for all products at the Oct 20th event remained lower on a YOY basis for the seventh consecutive auction, finishing down 10.5%.
The GDT Price Index remained 4.3% below previous year price levels at the Oct 20th auction, declining on a YOY basis for the 16th time in the past 17 events. The GDT Price Index finished 1.1% below the three year average price for the second auction of October, finishing below three year average figures for the 18th consecutive event.
Within the latest auction, increases in prices were led by butter (+3.3%), followed by cheddar cheese (+3.0%) and whole milk powder (+0.3%). The increases more than offset declines in skim milk powder (-0.2%), anhydrous milkfat (-0.5%) and lactose (-8.0%) prices. Butter milk powder and sweet whey powder were not sold at the Oct 20th event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and skim milk powder (SMP) has been adjusted to 35% protein content (equivalent to U.S. nonfat dry milk) in the $/lb columns below. CME spot and average futures prices are based on Oct 19th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Oct 20th event declined 1.3% from the previous event while finishing 10.5% lower on a YOY basis. The YOY decline in total quantities sold was the seventh experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of September, October and November.
Volumes sold for all products within the October auctions increased 0.4% from average September volumes sold but remained 9.9% below last year’s average volumes sold for the month of October. Volumes sold for all products finished 11.0% below three year average seasonal figures, declining to a four year low seasonal level, overall.
U.S. butter prices finished at a discount to GDT winning prices at the Oct 20th event as GDT butter prices rebounded to a three month high level. U.S. spot butter prices are currently trading at an 8.0% discount to GDT prices while CME futures prices traded at a 0.9% discount to GDT prices from Nov ’20 – Mar ’21. Butter was not sold at the GDT auction for Contract 6 (Apr ’21).
U.S. cheddar cheese prices remained at a premium to GDT winning prices at the Oct 20th event, despite GDT cheddar cheese prices rebounding to a three month high level. U.S. spot cheddar cheese prices are currently trading at a 44.8% premium to GDT prices while CME futures prices traded at an 11.4% premium to GDT prices from Nov ’20 – Apr ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Oct 20th event, despite GDT SMP prices declining for the second consecutive auction. U.S. spot NFDM prices are currently trading at a 14.4% discount to GDT SMP prices while CME futures prices traded at a 13.6% discount to GDT SMP prices from Nov ’20 – Mar ’21. SMP was not sold at the GDT auction for Contract 6 (Apr ’21).